With house prices rising at the incredible rate that they have done over the last decade, the cost of moving has increased with it. This means that home buying and selling costs are now, unfortunately, greater than ever, and have made the whole process of moving even more expensive. Although some of these costs can be wavered or reduced, many of them are dictated by the cost of the house and therefore are set prices.
Stamp Duty Land Tax
This is the biggest single cost you will incur while moving house, and unfortunately cannot be reduced or got rid of. This is a tax which is paid by the buyer to the government, just for selling the house. Changes to the tax mean that currently, you will pay:
- For properties less than £125,000 the tax does not have to be paid.
- For properties which sell for between £125,001 and £250,000 the tax is 2% of this portion.
- For properties which sell for between £250,001 and £925,000 the tax is 5% on this portion plus 2% on the previous portion.
- For properties which sell for between £925,001 and £1.5 million the tax is 10% on this portion plus 5% on the previous portion and 2% on the first taxable amount.
- For properties which sell for above £1.5 million, the tax charged on the portion above £1.5 million is 12%, plus the tax charged on the previous portions.
There used to be a loophole in the system which meant that the buyer could reduce the stamp duty tax they had to pay, by paying over the odds for fittings and fixtures. However, on 1 December 2006 new guidelines were brought in to try and prevent tax evasion, and this method is now no longer possible. Under these new rules extensive forms have to be completed, and the Inland Revenue has threatened that it will be conducting numerous random checks on houses which fall just below the cut-off line, to check that everything is in correct order.
Although estate agents are not a set requirement when buying or selling a house, most people tend to use them to make the process easier and quicker. It also means that you will have access to a much wider range of houses, and can prevent any potential dangers which can occur during private sales. They also have a level of expertise that you will not have, and will hopefully be able to get you the best price for the house you want. However, this does all come at a price.
Estate agents will charge a fee for their services of between 1% and 2%, which will vary according to where you live. The National Association of Estate Agents (NAEA) admits that there are certain places in the country where it will cost more to sell your house, so this is common practice and you will generally find that all estate agents will charge the same for an area. In London some estate agents will even charge as much as 3%, which, if you consider how expensive house prices are in the capital, will be a large percentage of your selling price.
Make sure that you check with the estate agent as soon as you apply to go on their books what their fee is, so you can work out what the competition with other agents in the area is like. This may end up swaying who you sell your house with. It is sometimes worth trying to haggle with the estate agent, especially if you have found another agent who will sell your house at a cheaper rate but you would like to sell with this particular agent. However, it is quite likely that a good agent will not need to say “yes”, and so one that will may not be a good choice to go for.
Solicitors are needed to approve all the paperwork and to make sure that the sale is legally made. Although you do not have to employ a solicitor, doing your own conveyancing may cause problems and you may get into legal difficulties if you are not totally sure about what you are doing.
Some solicitors will charge you a fix fee or a percentage of the selling price, whereas others will charge by the hour. Try and get a quote from the solicitor, or if they charge by the hour try and get them to estimate how many hours they think the work will take. If your sale is a standard one, most solicitors should be able to provide you with a reasonably accurate quote. Additional costs like Land Registry fees also may be added onto the quote. Try and use a solicitor that you know has a good reputation; often buyers and sellers will use the same solicitor.
Having the house you wish to buy surveyed is not essential, but is recommended to find out exactly what state the house is in. If you need to take out a mortgage, the lender will nearly always require you to have a survey carried out. The type of survey you have done will vary in how thorough they are; a valuation is a basic, surface survey, whereas a full structural survey will inform you about the structural state of the house. The variation in price is relatively small, therefore it is always advisable to go for the fuller report. If there are major structural problems with the house, then having a survey done could save you a great deal of money in the long run.
Some mortgage suppliers will often have their own “in-house” surveyors, and will let you use them at a discounted rate. Otherwise, a valuation will cost you around £85 and a homebuyer’s report will cost around £250. To get a full structural survey you will have to pay between £450 and £500. These prices are based on average sized houses, obviously for much larger properties these quotes will increase, and the state of repair which the house is in.
This part of moving is usually largely overlooked until the person actually comes to move out of their house. When you leave your house you will need to thoroughly clean it; many people end up hiring professional cleaners to come and clean the house as years of dirt can build up into a pretty extensive job. When you move into your new house you may want to clean that house as well, and again many people choose to use professional cleaners to save them time, which is often limited in the move.
In your agreement, there may also be general repairs which you have promised to make to the house before you leave. These can sometimes lead to larger than expected bills from such people as plumbers, electricians etc, or just from replacing door handles.
Depending on how far you have to move and how much furniture you have, you can either hire a removal company or do it yourself. The cost of hiring a removal company will depend on how much furniture you have and how far you are moving, but an average quote for moving from London to Bristol is £607. £600 is usually the approximate figure for most moves.
If you decide to do the move yourself, it is quite likely that you will need to hire a van to move all your larger items. Shop around to get the best quote. Some van hire companies will require you to have special insurance, so check that you are not already covered by your credit cards, home or motor insurance to avoid paying unnecessary costs.
You will find that you never have enough boxes, so if you are using a removal company ask them how many they think you will need to save you from buying too many or not enough. Some removal companies will be able to give you a special discount on boxes.
Try to be there when the removal company is, to check if there are any damages or breakages made to your furniture. If can often be difficult to charge these companies for any such unfortunate happenings once you are at your new house. Damage to the house can also occur during the move, and you will be charged for these by the new owners. Find out what the removal company’s policy is about damages to the furniture and house before you sign any contracts.
If the removal company is going to bill you by the hour, it is also worth being present to make sure that the movers do not work up large bills through idle time and slow work.
If you cannot move into your new house straight away, then it may be necessary to put some of your furniture into storage for a short time. Make sure that you hunt around for different quotes, and find out if insurance is included in this. The average quote for storing furniture from a three-bedroom house is around £100 per fortnight and around £650 for three months in London. In other cities this is likely to be a lot less.
When you first move into the house, you will often not be able to use the kitchen for a few days, if not weeks, whilst you unpack. This may mean that you work up a large bill in take-away costs.
General administration is also needed once you move in to let people know you have moved. In total, this can sometimes lead to quite a costly bill.